Bankrate, Inc. | |||||||||||||||||||||||||
Pro Forma Condensed Combined Balance Sheet | |||||||||||||||||||||||||
September 30, 2005 (Unaudited) | |||||||||||||||||||||||||
Pro Forma | Pro Forma | ||||||||||||||||||||||||
Bankrate | Wescoco | Adjustments | MMIS/Interest | Adjustments | |||||||||||||||||||||
September 30, | September 30, | Wescoco | September 30, | MMIS/Interest | Pro Forma | ||||||||||||||||||||
2005 | 2005 | (See Notes) | 2005 | (See Notes) | Combined | ||||||||||||||||||||
Assets | |||||||||||||||||||||||||
Cash and cash equivalents | $ | 40,041,788 | $ | 121,777 | $ | (10,086,064 | ) | (A) | $ | - | $ | (30,105,686 | ) | (A) | $ | (28,185 | ) | ||||||||
Accounts and notes receivable, net | 5,826,615 | 906,149 | 1,529,226 | 8,261,990 | |||||||||||||||||||||
Deferred income taxes | 5,996,940 | 5,996,940 | |||||||||||||||||||||||
Prepaid and other current assets | 306,821 | 22,868 | 27,000 | 356,689 | |||||||||||||||||||||
Total current assets | 52,172,164 | 1,050,794 | (10,086,064 | ) | 1,556,226 | (30,105,686 | ) | 14,587,434 | |||||||||||||||||
Furniture, fixtures and equipment, net | 912,165 | 86,951 | (9,581 | ) | (B) | 579,625 | (429,504 | ) | (B) | 1,139,656 | |||||||||||||||
Deferred income taxes | 1,069,303 | 1,069,303 | |||||||||||||||||||||||
Intangible assets, net | 144,806 | 75,650 | 3,315,971 | (C) | 28,846 | 8,241,154 | (C) | 11,806,427 | |||||||||||||||||
Goodwill | 6,402,556 | (C) | 22,457,727 | (C) | 28,860,283 | ||||||||||||||||||||
Other assets | 319,813 | 68,812 | 388,625 | ||||||||||||||||||||||
Total assets | $ | 54,618,251 | $ | 1,282,207 | $ | (377,118 | ) | $ | 2,164,697 | $ | 163,691 | $ | 57,851,728 | ||||||||||||
Liabilities and Stockholders' Equity | |||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||
Bank overdrafts | $ | - | $ | - | $ | - | $ | 284,807 | $ | 284,807 | |||||||||||||||
Accounts payable | 1,514,834 | 617,176 | 1,162,801 | 3,294,811 | |||||||||||||||||||||
Accrued expenses | 2,822,260 | 287,913 | 187,079 | 3,297,252 | |||||||||||||||||||||
Accrued Interest | - | 37,439 | (37,439 | ) | (D) | - | |||||||||||||||||||
Deferred revenue | 349,590 | 686,044 | 1,035,634 | ||||||||||||||||||||||
Current maturities of long term debt | 1,500,000 | (1,500,000 | ) | (D) | - | ||||||||||||||||||||
Other current liabilities | 151,096 | 7,657 | 158,753 | ||||||||||||||||||||||
Total current liabilities | 4,837,780 | 2,442,528 | (1,537,439 | ) | 2,328,388 | - | 8,071,257 | ||||||||||||||||||
Other liabilities | 170,121 | 1,500,000 | (1,500,000 | ) | (D) | 170,121 | |||||||||||||||||||
Total liabilities | 5,007,901 | 3,942,528 | (3,037,439 | ) | 2,328,388 | - | 8,241,378 | ||||||||||||||||||
Stockholders' equity: | |||||||||||||||||||||||||
Preferred stock | - | ||||||||||||||||||||||||
Common stock | 158,203 | 125 | (125 | ) | (E) | 2,000 | (2,000 | ) | (E) | 158,203 | |||||||||||||||
Additional paid in capital | 70,331,620 | 500,000 | (500,000 | ) | (E) | 70,331,620 | |||||||||||||||||||
Accumulated deficit | (20,879,473 | ) | (3,160,446 | ) | 3,160,446 | (E) | (165,691 | ) | 165,691 | (E) | (20,879,473 | ) | |||||||||||||
Total stockholders' equity | 49,610,350 | (2,660,321 | ) | 2,660,321 | (163,691 | ) | 163,691 | 49,610,350 | |||||||||||||||||
Total liabilities and stockholders' equity | $ | 54,618,251 | $ | 1,282,207 | $ | (377,118 | ) | $ | 2,164,697 | $ | 163,691 | $ | 57,851,728 |
See accompanying notes to pro forma condensed combined financial statements.
Bankrate, Inc. | ||||||||||||
Pro Forma Condensed Combined Statement of Operations | ||||||||||||
September 30, 2005 (Unaudited) |
Historical | Historical | Historical | |||||||||||||||||||||
Bankrate | Wescoco | Pro Forma | MMIS/Interest | Pro Forma | |||||||||||||||||||
Nine Months | Nine Months | Adjustments | Nine Months | Adjustments | |||||||||||||||||||
September 30, | September 30, | Wescoco | September 30, | MMIS/Interest | Pro Forma | ||||||||||||||||||
Revenue: | 2005 | 2005 | (See Notes) | 2005 | (See Notes) | Combined | |||||||||||||||||
Online publishing | $ | 31,684,841 | $ | 5,379,281 | $ | - | $ | 2,669,430 | $ | - | $ | 39,733,552 | |||||||||||
Print publishing and licensing | 3,474,061 | - | - | 9,153,067 | - | 12,627,128 | |||||||||||||||||
Total revenue | 35,158,902 | 5,379,281 | - | 11,822,497 | - | 52,360,680 | |||||||||||||||||
Cost of revenue: | |||||||||||||||||||||||
Online publishing | 5,365,122 | 4,499,072 | - | 485,481 | - | 10,349,675 | |||||||||||||||||
Print publishing and licensing | 3,295,487 | - | - | 6,802,758 | - | 10,098,245 | |||||||||||||||||
Total cost of revenue | 8,660,609 | 4,499,072 | - | 7,288,239 | - | 20,447,920 | |||||||||||||||||
Gross margin | 26,498,293 | 880,209 | - | 4,534,258 | - | 31,912,760 | |||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Sales | 2,756,038 | - | - | 31,788 | - | 2,787,826 | |||||||||||||||||
Marketing | 4,609,621 | 19,463 | - | 16,517 | - | 4,645,601 | |||||||||||||||||
Product development | 1,711,638 | - | - | - | - | 1,711,638 | |||||||||||||||||
General and administrative | 6,296,676 | 2,588,199 | - | 2,835,954 | - | 11,720,829 | |||||||||||||||||
Depreciation and amortization | 578,385 | 39,149 | 303,533 | (F) | 109,822 | 743,491 | (F) | 1,774,380 | |||||||||||||||
15,952,358 | 2,646,811 | 303,533 | 2,994,081 | 743,491 | 22,640,274 | ||||||||||||||||||
Income from operations | 10,545,935 | (1,766,602 | ) | (303,533 | ) | 1,540,177 | (743,491 | ) | 9,272,486 | ||||||||||||||
Other income: | |||||||||||||||||||||||
Interest income (expense) | 655,295 | (175,421 | ) | 14,574 | (G) | - | (491,471 | ) | (G) | 2,977 | |||||||||||||
Insurance recovery in excess of costs and expenses | 220,705 | - | - | - | - | 220,705 | |||||||||||||||||
Total other income | 876,000 | (175,421 | ) | 14,574 | - | (491,471 | ) | 223,682 | |||||||||||||||
Income before income taxes | 11,421,935 | (1,942,023 | ) | (288,959 | ) | 1,540,177 | (1,234,962 | ) | 9,496,168 | ||||||||||||||
Provision for income taxes | (4,340,336 | ) | - | 847,773 | (H) | - | (115,982 | ) | (H) | (3,608,545 | ) | ||||||||||||
Net income | $ | 7,081,599 | $ | (1,942,023 | ) | $ | 558,814 | $ | 1,540,177 | $ | (1,350,944 | ) | $ | 5,887,623 | |||||||||
Basic and diluted net income per share: | |||||||||||||||||||||||
Basic | $ | 0.45 | $ | 0.37 | |||||||||||||||||||
Diluted | $ | 0.42 | $ | 0.35 | |||||||||||||||||||
Weighted average common shares outstanding: | |||||||||||||||||||||||
Basic | 15,802,409 | 15,802,409 | |||||||||||||||||||||
Diluted | 16,762,149 | 16,762,149 |
See accompanying notes to pro forma condensed combined financial statements. |
Bankrate, Inc. | |||||||||||||
Pro Forma Condensed Combined Statement of Operations | |||||||||||||
December 31, 2004 (Unaudited) |
Historical | Historical | Historical | |||||||||||||||||||||
Bankrate | Wescoco | Pro Forma | MMIS/Interest | Pro Forma | |||||||||||||||||||
Year Ended | Period Ended | Adjustments | Year Ended | Adjustments | |||||||||||||||||||
December 31, | December 31, | Wescoco | December 31, | MMIS/Interest | Pro Forma | ||||||||||||||||||
Revenue: | 2004 | 2004 | (See Notes) | 2004 | (See Notes) | Combined | |||||||||||||||||
Online publishing | $ | 33,942,241 | $ | 2,703,180 | $ | - | $ | 3,339,848 | $ | - | $ | 39,985,269 | |||||||||||
Print publishing and licensing | 5,262,020 | - | - | 12,886,226 | - | 18,148,246 | |||||||||||||||||
Total revenue | 39,204,261 | 2,703,180 | - | 16,226,074 | - | 58,133,515 | |||||||||||||||||
Cost of revenue: | |||||||||||||||||||||||
Online publishing | 5,534,456 | 2,191,937 | - | 440,702 | - | 8,167,095 | |||||||||||||||||
Print publishing and licensing | 4,359,444 | - | - | 9,872,823 | - | 14,232,267 | |||||||||||||||||
Total cost of revenue | 9,893,900 | 2,191,937 | - | 10,313,525 | - | 22,399,362 | |||||||||||||||||
Gross margin | 29,310,361 | 511,243 | - | 5,912,549 | - | 35,734,153 | |||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Sales | 4,186,799 | - | - | 59,623 | - | 4,246,422 | |||||||||||||||||
Marketing | 6,357,424 | 9,859 | - | 22,436 | - | 6,389,719 | |||||||||||||||||
Product development | 2,405,676 | 141,680 | - | - | - | 2,547,356 | |||||||||||||||||
General and administrative | 6,667,448 | 2,528,943 | - | 4,407,129 | - | 13,603,520 | |||||||||||||||||
Legal settlements | 510,000 | - | - | - | - | 510,000 | |||||||||||||||||
Severance charge | 260,000 | - | - | - | - | 260,000 | |||||||||||||||||
Depreciation and amortization | 742,659 | 27,303 | 404,711 | (F) | 308,846 | 991,322 | (F) | 2,474,841 | |||||||||||||||
21,130,006 | 2,707,785 | 404,711 | 4,798,034 | 991,322 | 30,031,858 | ||||||||||||||||||
Income from operations | 8,180,355 | (2,196,542 | ) | (404,711 | ) | 1,114,515 | (991,322 | ) | 5,702,295 | ||||||||||||||
Other income: | |||||||||||||||||||||||
Interest income (expense) | 410,107 | (24,005 | ) | (70,522 | ) | (G) | - | (307,580 | ) | (G) | 8,000 | ||||||||||||
Insurance recovery in excess of costs and expenses | - | - | - | - | - | - | |||||||||||||||||
Total other income | 410,107 | (24,005 | ) | (70,522 | ) | - | (307,580 | ) | 8,000 | ||||||||||||||
Income before income taxes | 8,590,462 | (2,220,547 | ) | (475,233 | ) | 1,114,515 | (1,298,902 | ) | 5,710,295 | ||||||||||||||
Provision for income taxes | 4,765,660 | - | 1,064,235 | (H) | - | 72,792 | (H) | 5,902,687 | |||||||||||||||
Net income | $ | 13,356,122 | $ | (2,220,547 | ) | $ | 589,002 | $ | 1,114,515 | $ | (1,226,110 | ) | $ | 11,612,982 | |||||||||
Basic and diluted net income per share: | |||||||||||||||||||||||
Basic | $ | 0.87 | $ | 0.75 | |||||||||||||||||||
Diluted | $ | 0.84 | $ | 0.73 | |||||||||||||||||||
Weighted average common shares outstanding: | |||||||||||||||||||||||
Basic | 15,438,097 | 15,438,097 | |||||||||||||||||||||
Diluted | 15,975,382 | 15,975,382 |
See accompanying notes to pro forma condensed combined financial statements. |
NOTES TO PROFORMA CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
(A) | To reflect cash paid by Bankrate, Inc. (“Bankrate”) to acquire Wescoco LLC (“Wescoco”) and Mortgage Market Information Services, Inc. and Interest.com, Inc. (collectively, “MMIS”) and to reflect transaction costs for the acquisitions. |
(B) | To reflect the fair value adjustment of fixed assets of Wescoco and MMIS acquired. |
(C) | To reflect the fair value of intangible assets of Wescoco and MMIS acquired and to reflect goodwill arising from the excess acquisition cost over the fair value of tangible and intangible assets of Wescoco and MMIS acquired. The purchase price, purchase price allocation and payment for the acquisition are summarized as follows: |
Wescoco | MMIS/Interest.com | ||||||
Total purchase price (Cash Paid) | $ | 10,086,064 | $ | 30,105,686 | |||
Total net assets acquired: | 54,521 | (333,634 | ) | ||||
Excess purchase price over net assets acquired | 10,031,543 | 30,439,320 | |||||
Identified intangible assets: | 3,400,000 | 8,270,000 | |||||
Goodwill | $ | 6,631,543 | 22,169,320 |
(D) | To adjust for Wescoco debt and associated accrued interest not assumed by Bankrate. |
(E) | To reflect the elimination of shareholders equity accounts of Wescoco and MMIS. |
(F) | To adjust depreciation and amortization expense reflecting the fair value of tangible and intangible assets acquired using the straight-line method over a weighted average period for tangible assets of three years and periods ranging from three to twenty years for intangible assets. |
(G) | To reflect the decrease in interest income resulting from the decrease in Bankrate cash used to make the acquisitions and to adjust for interest expense related to debt not assumed by Bankrate. |
(H) | To reflect the tax provision arising out of the acquisitions using rates ranging from 38% to 40% for the periods presented. |